Google pulls the plug on its free music service for China

Google said in a blog post the service's popularity failed to meet expectations

By Michael Kan | 21 September 12

Google is shutting a Chinese music search service that offered free licensed music downloads because it wasn't popular enough, the company said Friday.

The announcement came in a blog posting from senior engineering director Boon-Lock Yeo, who said the company was shutting down the service in order to focus on improving more influential Google products.

Google launched its free music service in China in 2009 as a way to compete with rival Baidu, which offered a similar service that made it easy for users to locate free MP3 downloads.

To provide the free music, the service relied on links to licensed downloads from the Google-funded Top100.cn, a Chinese online music provider that has signed licensing deals with various labels across the world.

But despite the partnership, Yeo said in his blog, "the product's influence never quite reached as high as our expectations for it. Therefore, we have decided to transfer its resources to other products."

Google's popularity in the country has waned ever since 2010, when the company pulled the plug on its China-based search engine following disputes with the government over censorship and hacking concerns. As part of that shutdown, new services such as Google Play were never launched in China, while the few remaining services there, such as the company's music search, were left to continue to operate.

Once China's second largest search provider, Google has now fallen to fourth place, overtaken by other local companies, according to Internet analytics site CNZZ.com. Google's market share is at 5 percent, while Baidu's is 74 percent.

Top100.cn, which is only accessible in China, still continues to operate in the country, with Google its largest shareholder. The company, however, expects the shutdown will have a major impact on its user base, 70 percent of which come from Google's music search.

"It's regrettable, and we feel sorry about the shutdown," said Gary Chen, CEO for Top100.cn.

The company initially had high hopes for Google's music service, which when launched exceeded Top100.cn's expectations for user numbers and advertising revenue. At the same time, the service was also important in pioneering a new business model for online music, at a time when most users in China were downloading pirated songs over the Internet.

"This was the first licensed music service in China," Chen said. "We were very excited that Google wanted to build a music search service that could completely change China's music piracy landscape."

But since 2010, Top100.cn.'s site has declined in popularity, which Chen attributes to the shutdown of Google's China-based search engine.

"We gave a lot of suggestions to Google," he said, noting that online music business was a politically safer option for the search giant to invest in. "There are also a lot of cases of companies using music to expand. Baidu has its MP3 search, Apple has its iPod and iTunes. They all used music to build up their services," Chen said.

One of the suggestions Chen recommended included Google offering an Android-based music service for China. But despite the input from Top100.cn, Google never changed its strategy, Chen said, and instead has decided to focus its resources on other products.

With the loss of Google's music search, Top100.cn plans on shifting gears and focusing on areas like China's mobile Internet space. But despite the company's struggles, Chen said Top100.cn and Google helped stop online music piracy in China by providing an alternative business model. Last year, Baidu also began paying record companies to offer licensed music, after years of facing criticism for hosting links to pirated songs.

"More sites are providing licensed music downloads now. It's because we started this project, that this happened," Chen said.